Investment property sales in Dallas Fort Worth are up—in a big way. Cushman & Wakefield of Texas has released its midyear numbers, which show 7.2 million square feet of industrial buildings trading hands during the first six months of 2011, a whopping 422.5 percent increase when compared to 2010. The robust activity has propelled Dallas-Fort Worth to the No. 2 market (in terms of sales volume) in the country, behind industrial stalwart Chicago.
“Buyers like industrial properties, and they like North Texas,” said Susan Gwin, executive director of Cushman & Wakefield’s capital markets group. “The user market has really picked up as well. Investors like stability; they still go back to fundamentals—good, solid properties—and they’re willing to pay for those prime assets.”
On the office side, Dallas-Fort Worth has seen 3.95 million square feet trade hands so far this year—an increase of 2.5 million square feet when compared to 2010, and ranking Dallas fifth nationally for sales volume behind Midtown (Manhattan), Washington D.C., Chicago, and Boston.
North Texas is attracting both core property buyers and value-add investors. Submarkets that are seeing the most activity include Uptown, Preston Center, and Plano/Frisco, Gwin said.
“Investors are looking for options,” she said. “They like Texas. They like what they’re hearing about job growth and the positives of the state versus some of the others. That gives folks who haven’t been interested in (North Texas) a reason to come here. You’ve also got the folks who have long been investing in Dallas. They like the dynamics, they like the growth, and they like the trends they’re seeing. So their appetite is continuing to pick up, too.”
“The challenge is that there’s a lot of money on the sidelines chasing properties,” Gwin said. “It’s very competitive. And buyers fear that the window of opportunity will begin to close in the next 10-12 months. Prices will go up and fewer properties will be available.”
According to Cushman & Wakefield, cap rates currently fall between 7.5 percent and 8.5 percent for Class A office assets, and between 8.5 percent and 9.5 percent for Class B properties. On the industrial side, cap rates are ranging between 6.8 percent and 7.8 percent for Class A space, and between 7.8 percent and 8.8 percent for Class B assets.
Gwin said she expects commercial sales activity to continue to be strong for the second half of 2011—meaning no rest for investment property sales professionals.
“The pipeline typically gets more full as the year goes on,” she said. “We are well positioned in the market. Everyone is heads down, working hard to keep up with the pace and service their clients.”
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